Top performing cautious managed fund now on Cofunds

Distinction Asset Management announces its flagship IM Distinction Diversified Real Return (DRR) fund is now available on the Cofunds platform.

The DRR Fund is the number one fund in the IMA Cautious Managed sector, in both total and risk-adjusted returns. To the end of April this year since launch, the multi-asset, inflation-benchmarked fund gained 21.5%* with an annualised standard deviation of 5.2%, generating the best risk-adjusted returns of all the funds in the IMA Cautious, Balanced and Active Managed sectors.

Annualised return of 16.5% annualised monthly volatility of 5.2 and a Sharpe Ratio of 3.0 from launch on 19/01/10 until 30/04/11.

The DRR fund takes advantage of a broad opportunity set and flexible investment approach to target equity-like returns over a market cycle but with the volatility typically associated with a global bond fund. The fund has the potential to comfortably slot into both risk-based and cash flow-based financial planning models due to its clearly defined risk-budget and inflation plus 4% per annum return target.

Patrick Cooper, CEO of Distinction Asset Management said, “We are engaging with IFAs throughout the country, and are pleased with the level of interest we have been generating in Distinction Asset Management funds. Many clients are concerned about the prospects of sustained and higher inflation and the impact this will have on their clients’ wealth. The DRR is a great solution to that issue. It is a multi-asset, real return strategy with an RPI+4% per annum target. Most funds hope to beat inflation, but DRR invests specifically with this risk in mind”.

Russell Lancaster, Head of Commercial at Cofunds said: "We add funds to the platform based on adviser demand and the IM Distinction Diversified Real Return fund has good backing. Overall this year we have seen very strong demand for cautious managed funds. The Cautious Managed sector was the top selling sector in Q1, attracting 34% of retail net sales. Adding the IM Distinction Diversified Real Return fund to the platform enables us to provide advisers with an even greater choice of cautious funds at a time when there is clearly much interest in the sector. "

* Source: Lipper, a REUTERS company. Basis: Total returns, net of fees, GBP, 19/01/10-30/04/11. Volatility based on annualised monthly standard deviation. Risk free rate used in Sharpe Ratio calculation is Libor 3mth GBP.